Press Release

Press release

Global Power Reports First Quarter 2018 Results

Generated $7.1 million of cash from operating activities in
continuing operations

IRVING, Texas--(BUSINESS WIRE)--
Global
Power Equipment Group Inc. (OTC:GLPW) ("Global Power" or the
"Company") today reported its financial results for its first quarter
ended March 31, 2018. First quarter 2017 results include Hetsco Inc.,
which was divested on January 13, 2017.

As previously reported, the Mechanical Solutions and Electrical
Solutions segments have been classified as discontinued operations and,
accordingly, the results for those segments are presented as such.
Results of continuing operations are presented as a single segment
comprised of the former Services segment (or "Williams") and corporate
operations, unless otherwise noted.

First quarter 2018 revenue from continuing operations was $43.1
million compared with $45.6 million in the prior-year period.
Excluding revenue from the Hetsco divestiture and a reserve reversal
from first quarter 2017, revenue increased 8% in the first quarter
2018.

Loss from continuing operations for the 2018 first quarter improved to
$2.2 million, or $(0.12) per share, compared with $11.6 million, or
$(0.67) per share, for the corresponding 2017 period.

Total net loss was reduced to $4.0 million, or $(0.22) per share,
compared with $16.8 million, or $(0.97) per share, for the prior-year
period.

Adjusted EBITDA from continuing operations for the first quarter 2018
was $0.4 million compared with $(8.8) million for the first quarter
2017. See NOTE 1—Non-GAAP Financial Measures in the attached tables
for important disclosures regarding Global Power's use of Adjusted
EBITDA, as well as a reconciliation of net income to Adjusted EBITDA.

Tracy Pagliara, President and CEO of Global Power, noted, "The momentum
in our business that began late last year has continued into 2018.
During the first quarter of 2018, our backlog and pipeline of
opportunities continued to grow and, as previously reported, we resolved
several important contingencies. In addition, our operating performance
is improving. We achieved 15% gross margin in the quarter, which
underscores our earnings power potential. We also continue to
aggressively implement our plan to achieve an annualized general and
administrative expenses run rate of approximately $14 million to $18
million by the end of 2018. We expect to achieve this plan by incurring
restructuring costs of approximately $8 million to $12 million in 2018.

"Importantly, we are also making progress on the sale of the
Koontz-Wagner business and have received multiple bids. In addition, our
Houston facility operations have been stabilized. Our goal remains to
have the Koontz-Wagner divestiture completed by the end of June. Of
note, the potential sale of Global Power and/or Williams has been
eliminated from consideration as a strategic alternative at this time.
In the meantime, we are diligently moving forward on our initiatives to
recapitalize our balance sheet with new asset-based and restructured
term loans. We believe that a strengthened balance sheet, coupled with
the improving operational performance of our business and substantially
reduced general and administrative costs, will position our Company for
future growth and profitability."

First Quarter 2018 Financial Results Review
(Discussion is regarding continuing operations and compared with the
corresponding period in 2017 unless noted otherwise)

First Quarter 2018 Revenue Bridge

(in millions)

$ Change

% Change

First quarter 2017 revenue

$

45.6

Project revenue

3.1

6.8

%

Divestiture of Hetsco

(1.2

)

(2.6

)%

Reserve release for liquidated damages in Q1 2017

(4.4

)

(9.6

)%

Total change

(2.5

)

(5.5

)%

First quarter 2018 revenue

$

43.1

Revenue for the quarter was down $2.5 million. However, when first
quarter 2017 revenue is adjusted for the $1.2 million reduction in
revenue from the divestiture of Hetsco in January 2017 and the benefit
of the reversal of a $4.4 million liquidated damage contingent liability
reserve, revenue improved 8%. The $8.4 million increase from
construction activities at Plant Vogtle Units 3 & 4 more than offset
declines from fewer non-recurring projects and the timing of a nuclear
outage.

First Quarter 2018 Gross Profit Bridge

(in millions)

$ Change

First quarter 2017 gross profit

$

(1.5

)

Project revenue and incremental margin

(0.1

)

Divestiture of Hetsco

(0.6

)

Estimated contract losses

13.1

Reserve release for liquidated damages in Q1 2017

(4.4

)

Total change

8.0

First quarter 2018 gross profit

$

6.5

Gross profit increased $8.0 million to $6.5 million and was 15% of
revenue. Last year's first quarter was negatively impacted by $13.1
million of new or revised estimated losses on three projects, which was
partially offset by $4.4 million related to the release of the
contingent liability reserve discussed previously, which had no
associated costs.

Operating expenses for the 2018 first quarter were down $3.2 million
including a $1.6 million reduction of restatement expenses related to
the filing of the Annual Report on Form 10-K for the year ended December
31, 2015. Additionally, in the first quarter of 2018, labor-related
expenses decreased $0.7 million and stock-based compensation expense
decreased $0.5 million. Furthermore, other expenses decreased $0.7
million. These decreases were partially offset by an increase in
professional fees related to strategic alternative activities.

Interest expense decreased $0.3 million on lower average debt balances.

Balance Sheet and Cash Flow

For the three months ended March 31, 2018, the Company's operating
activities, including discontinued operations, provided $2.2 million of
cash. The Company's liquidity remains constrained as a result of
continued losses, inconsistent cash flows from operations and
constraints on borrowing additional amounts for short-term working
capital needs or issuing additional standby letters of credit.

Outlook

At March 31, 2018, backlog was $150.1 million up from $137.7 million at
the end of 2017. The increase in construction activities at Plant Vogtle
Units 3 & 4 and new contract awards contributed to the larger backlog.

Mr. Pagliara concluded, "While our liquidity position remains a
challenge, we are confident in our ability to resolve that issue as we
press forward with the sale of the Koontz-Wagner business, our
restructuring plans and the ultimate recapitalization of our balance
sheet. We have a strong and diverse pipeline of opportunities, including
the potential for nuclear decommissioning projects, gaining more scope
at Plant Vogtle Units 3 & 4 and adding new customers. We are also
expanding our operations into Canada and the oil and gas industry while
pursuing opportunities with analog to digital controls conversions."

Webcast and Teleconference

The Company will host a conference call on Tuesday, May 22, 2018, at
10:00 a.m. Eastern time (9:00 a.m. Central). A webcast of the call and
an accompanying slide presentation will be available at www.globalpower.com.
To access the conference call by telephone, listeners should dial
201-493-6780.

An audio replay of the call will be available from 1:00 p.m. Eastern
time (12:00 p.m. Central) on the day of the teleconference until the end
of day on June 5, 2018. To listen to the audio replay, dial 412-317-6671
and enter conference ID number 13679912. Alternatively, you may access
the webcast replay at http://ir.globalpower.com/,
where a transcript will be posted once available.

About Global Power

Global Power Equipment Group Inc. and its wholly owned subsidiaries
offer a broad range of general and specialty construction, maintenance
and modification, and plant management support services for the nuclear,
hydro and fossil power generation industries as well as pulp and paper,
refining, petrochemical, government, manufacturing and other industries.

This press release contains "forward-looking statements" within the
meaning of the term set forth in the Private Securities Litigation
Reform Act of 1995. The forward-looking statements include statements or
expectations regarding the timing or outcome of the Electrical Solutions
strategic review process, if any, the ability to close on an asset-based
loan, the outcome of a strategic review process for Global Power, the
Company's ability to comply with the terms of its debt instruments, the
impact of planned cost reductions, reorganization and restructuring
efforts, the Company's ability to implement its liquidity plan,
expectations for growth of the business in 2018 and ability to realize
the inherent value in the Company's capabilities, ability to compete
well in Global Power's markets, and other related matters. These
statements reflect the Company's current views of future events and
financial performance and are subject to a number of risks and
uncertainties, including its ability to comply with the terms of its
credit facility and enter into new lending facilities and access letters
of credit, ability to timely file its periodic reports with the U.S.
Securities and Exchange Commission ("the SEC"), ability to implement
strategic initiatives, business plans, and liquidity plans, and ability
to maintain effective internal control over financial reporting and
disclosure controls and procedures. Actual results, performance or
achievements may differ materially from those expressed or implied in
the forward-looking statements. Additional risks and uncertainties that
could cause or contribute to such material differences include, but are
not limited to, decreased demand for new gas turbine power plants,
reduced demand for, or increased regulation of, nuclear power, loss of
any of the Company's major customers, whether pursuant to the loss of
pending or future bids for either new business or an extension of
existing business, termination of customer or vendor relationships, cost
increases and project cost overruns, unforeseen schedule delays, poor
performance by its subcontractors, cancellation of projects,
competition, including competitors being awarded business by current
customers, damage to the Company's reputation, warranty or product
liability claims, increased exposure to environmental or other
liabilities, failure to comply with various laws and regulations,
failure to attract and retain highly-qualified personnel, loss of
customer relationships with critical personnel, effective integration of
acquisitions, volatility of the Company's stock price, deterioration or
uncertainty of credit markets, changes in the economic and social and
political conditions in the United States, including the banking
environment or monetary policy, and any suspension of the Company's
continued reporting obligations under the Securities Exchange Act of
1934, as amended.

Other important factors that may cause actual results to differ
materially from those expressed in the forward-looking statements are
discussed in the Company's filings with the SEC, including the section
of the Annual Report on Form 10-K for its 2017 fiscal year titled "Risk
Factors." Any forward-looking statement speaks only as of the date of
this press release. Except as may be required by applicable law, Global
Power undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, and you are cautioned to not to rely upon
them unduly.

Financial Tables Follow.

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)

Three Months Ended March 31,

($ in thousands, except share and per share amounts)

2018

2017

Revenue

$

43,121

$

45,632

Cost of revenue

36,671

47,187

Gross profit (loss)

6,450

(1,555

)

Gross margin

15.0

%

(3.4

)%

Selling and marketing expenses

426

567

General and administrative expenses

6,590

9,545

Depreciation and amortization expense

221

335

Total operating expenses

7,237

10,447

Operating loss

(787

)

(12,002

)

Operating margin

(1.83

)%

(26.3

)%

Interest expense, net

1,378

1,701

Gain on sale of business and net assets held for sale

—

(239

)

Other (income) expense, net

(212

)

(1

)

Total other (income) expenses, net

1,166

1,461

Loss from continuing operations before income tax expense (benefit)

(1,953

)

(13,463

)

Income tax expense (benefit)

285

(1,838

)

Loss from continuing operations

(2,238

)

(11,625

)

Loss from discontinued operations before income tax expense (benefit)

(1,708

)

(4,244

)

Income tax expense (benefit)

42

979

Income (loss) from discontinued operations

(1,750

)

(5,223

)

Net loss

$

(3,988

)

$

(16,848

)

Basic earnings (loss) per common share

Loss from continuing operations

$

(0.12

)

$

(0.67

)

Earnings (loss) from discontinued operations

(0.10

)

(0.30

)

Basic earnings (loss) per common share

$

(0.22

)

$

(0.97

)

Diluted earnings (loss) per common share

Loss from continuing operations

$

(0.12

)

$

(0.67

)

Earnings (loss) from discontinued operations

(0.10

)

(0.30

)

Diluted loss per common share

$

(0.22

)

$

(0.97

)

Weighted average common shares outstanding (basic and diluted)

17,939,888

17,470,817

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

($ in thousands, except share and per share amounts)

March 31, 2018

December 31, 2017

ASSETS

Current assets:

Cash and cash equivalents

$

8,021

$

4,594

Restricted cash

10,421

11,562

Accounts receivable, net of allowance of $1,501 and $1,568,
respectively

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIESNON-GAAP
FINANCIAL MEASURE (UNAUDITED)

This press release contains financial measures not derived in accordance
with accounting principles generally accepted in the United States
("GAAP"). A reconciliation to the most comparable GAAP measure is
provided below.

CONSOLIDATED ADJUSTED EBITDA

Three Months Ended March 31,

(in thousands)

2018

2017

Net loss-continuing operations

$

(2,238

)

$

(11,625

)

Add back:

Depreciation and amortization expense

221

335

Gain on sale of business and net assets held for sale

—

(239

)

Interest expense, net

1,378

1,701

Restatement expenses

130

1,720

Stock-based compensation

194

721

Income tax expense (benefit)

285

(1,838

)

Bank restructuring costs

—

200

Severance costs

14

151

Asset disposition costs

326

36

Franchise taxes

65

76

Adjusted EBITDA-continuing operations

375

(8,762

)

Adjusted EBITDA-discontinued operations

(1,706

)

(2,635

)

Adjusted EBITDA

$

(1,331

)

$

(11,397

)

NOTE 1—Non-GAAP Financial Measures

Adjusted EBITDA is not calculated through the application of GAAP and is
not the required form of disclosure by the U.S. Securities and Exchange
Commission. Adjusted EBITDA is the sum of our net loss before interest
expense, net and income tax (benefit) expense and unusual gains or
charges. It also excludes non-cash charges such as depreciation and
amortization. The Company's management believes adjusted EBITDA is an
important measure of operating performance because it allows management,
investors and others to evaluate and compare the performance of its core
operations from period to period by removing the impact of the capital
structure (interest), tangible and intangible asset base (depreciation
and amortization), taxes and unusual gains or charges (stock-based
compensation, restatement expenses, asset disposition costs, gain on
sale of business and net assets held for sale, bank restructuring costs,
loss on sale-leaseback and severance costs), which are not always
commensurate with the reporting period in which such items are included.
Global Power's credit facility also contains ratios based on EBITDA.
Adjusted EBITDA should not be considered an alternative to net income or
as a better measure of liquidity than net cash flows from operating
activities, as determined by GAAP, and, therefore, should not be used in
isolation from, but in conjunction with, the GAAP measures. The use of
any non-GAAP measure may produce results that vary from the GAAP measure
and may not be comparable to a similarly defined non-GAAP measure used
by other companies.